Antibiotic U-68,204, of the subject application, is related to thiolactomycin. See H. Sasaki, et al., J. Antibiotics, 35, 396 (1982). It also is related to citreothiolactone, but not as closely. See Y. Shizuri, et al., Tet. Letters, 24, 1053 (1983). Further, U-68,204 is related to thiotetromycin. See S. Omura, et al., J. Antibiotics, 36, 109 (1983). Antibiotic U-68,204 differs structurally from thiotetromycin in that one of the methyl groups of thiotetromycin is converted to an amide. The structural similarities are as shown in Chart I.